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Curious, how does Twitter make money?

I'm looking through Twitter and other websites that are identical, like Naymze. As I look, I'm not seeing any advertising or any paid services, or any other revenue streams. Also, there is not enough Tweeters that use the SMS services enough to generate income through cell phone calls.

How is it that they pay for their servers and employees, or even make the site profitable for the initial developer and owner?

Thatâ€™s what I learned at AOL: Once you have critical mass you canâ€™t help but make a fortune. An absolute idiot with 10-20M users can make a ton of money. So, get to tens of millions of users and forget about money.

Game over.

Done.

Running a startup is NOT about revenue anymoreâ€“itâ€™s about critical mass. Itâ€™s about scale. When youâ€™re playing in the big leagues with unlimited access to capital you shouldnâ€™t worry about revenue BEFORE you have critical mass.*

* Note: if youâ€™re not a player like Ev, and you donâ€™t have unlimited access to capital do not take this advice and focus on building revenue streams

Okay, so I have seen your question on here all day, so I decided to Google it. The answer is, that they do not make any money as of yet. You might think that they make money from SMS when someone updates via their phones, but it seems they are actually paying the cell phone companies instead. So, it also seems that people like you are curious and some people are actually wanting to find this information out because they want to copy their service.

So, very good question. Did anyone else look into this yet? Let me know what you find out.

When Twitter gets to scale here are the very obvious, and wildly lucrative, business models:

1. In feed advertising Imagine if every 10th, 20th, or 100th tweet was an advertisement. Would that be so horrible? No, not at all. “your free Twitter account is brought to you by Apple’s iPhone” would be perfectly acceptable to users and advertisers on the web. These ads will get solid click through if targeted well…. also they could be display/visual ads that really “pop” off the page since Twitter pages are text based (as opposed to say Flickr where the graphical ads would compete with the photos).

2. SMS Advertising Users would be perfectly fine if every 100-200 or so SMS Tweets they got an advertisement. If/when Twitter

turns on SMS advertising they will have the largest independent inventory of SMS advertising in the world. You think Google or a carrier mighty be interested in that?

3. Subscriptions
Iâ€™ve been asking Ev to pay for a reliable Twitter professional service fro over a year. I would estimate 1-5% of Twitter users would pay for a professional version that had 99.9999% up time, as well as special features like file storage for MP3 files, photos and videos (i.e. like Pownceâ€™s pro account). This might â€œonlyâ€ be a ten to fifty million a year opportunity, so I wouldnâ€™t focus on it.

Bottom line? Ev shouldnâ€™t worry about a business model for another two years. Just build the service to *massive* critical mass. Get to 100M usersâ€“which is where the service is headed. If the service gets to 100M monthly users it will be worth a couple of billion.